Tuesday, 24 October, 2017

Toyota's quarterly profit improves on strong sales

Georgetown Kentucky Toyota Plant Toyota, Mazda plan joint assembly plant in US, report says
Juana Turner | 05 August, 2017, 00:25

Trump welcomed the announcement of the U.S. factory, calling it "a great investment in American manufacturing". This plant will have the capacity of manufacturing 300,000 vehicles per year as the production process will be divided between the two automakers.

TMC Senior Managing Officer Tetsuya Otake said, "Despite the positive effect of cost reduction efforts, operating income was down 67.9 billion yen, mainly due to the effects of marketing activities and an increase in expenses".

After reassessing the auto industry market, Toyota has changed its strategy to make Corollas at a plant in Guanajuato, Mexico.

Toyota said it would not move Corolla production to its plant in Mexico, which is now under construction, but it would instead make its Tacoma model there.

"Toyota may benefit from a taste of Mazda's zoom-zoom flavor and add to its global volume count, but most of the benefit of the link-up goes to Mazda, which desperately needs USA production in this protectionist era and help with advanced technology development".

Shares in Mazda, which has no United States plant, soared more than 5 percent in Tokyo trade early Friday while Toyota was marginally lower. Mazda will have a share of 0.25% in Toyota its much larger rival.

Toyota had meant to build Corollas - the world's best-selling auto - at the plant in Mexico.

"They're going to start looking at sites to look at the best benefits for Toyota and Mazda".

The Japanese automakers said in a statement Friday that the facility would be operational by 2021, but did not specify where it would be built.

It also comes after Toyota and other vehicle companies vocally opposed Trump's plans to pursue sweeping changes to the North American Free Trade Agreement, which bolstered Mexican manufacturing. Mazda now supplies Toyota with the Mazda3, which is sold as the Toyota iA, and the two plan to "explore the possibilities of other complementary products on a global level", going forward.

Regional wholesale volume in North America inched ahead 1.1 percent to 723,000 vehicles for the fiscal first quarter, but North America kept its position as Toyota's biggest market. The US automaker bought 25 percent of Mazda in 1979, and raised it to 33.4 percent in 1996. But Ford began cutting ties in 2008, and has shed its stake in Mazda.

On Friday, Toyota posted $5.6 billion profit from April-June, up by 11 percent from a year earlier. Quarterly sales rose 7 percent to 7.05 trillion yen ($64 billion).

For the quarter, Toyota weathered a slowdown in demand in the US auto market, the world's second largest after China, which is delivering a knock to many global automakers after years of growth boosted profits.

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